Exhibit 10.36


 


[    ] = Confidential Treatment Requested Under
17 C.F.R. §§ 200.80(b)(4) and 240.24b-2; Text Omitted and Filed
Separately with the Securities and Exchange Commission


 


Agreement No. 91-1022A


 


AMENDMENT TO LICENSE AGREEMENT


 


This Amendment made
effective the 20th day of May, 2004, is by and between the Wisconsin Alumni
Research Foundation (hereinafter called “WARF”), having an address at 614
Walnut Street, Madison, Wisconsin 53726; and Vical Incorporated (hereinafter
called “Vical”), having an address at 10390 Pacific Center Court, San Diego, CA
92121-4340.


 


WITNESSETH


 


WHEREAS,
WARF and Vical entered into a License Agreement made effective January 1,
1991 (the “Agreement”); and


 


WHEREAS,
WARF and Vical would each like to amend the Agreement to clarify their rights
and obligations under the Agreement as it pertains to the sublicensing
activities of Vical.


 


NOW
THEREFORE, in consideration of the mutual covenants and
agreements set forth below and in the Agreement, the parties covenant and agree
as follows:


 


1.             Section 2C of the
Agreement is hereby deleted and replaced with the following:


 


“(i)          WARF hereby grants to
Vical the exclusive right to grant sublicenses under this Agreement.  Such sublicense agreements shall be in
writing.  Any such sublicense shall
fully protect WARF’s income stream, product liability and other rights
consistent with the terms of this Agreement, including, without limitation,
Section 10.  Such sublicenses under this
Agreement shall continue only for as long as this Agreement remains in force,
and Vical shall state that fact prominently and unambiguously in any sublicense
agreement.  Notwithstanding the
foregoing, Vical may grant exclusive sublicenses under this Agreement which
extend beyond the termination of this Agreement with the prior written consent
of WARF.  Such consent shall not be
unreasonably withheld.  Such exclusive
sublicenses shall contain terms obligating the sublicensee to WARF and to the
terms of this Agreement (including royalty rates, product liability and other
rights owing WARF hereunder) as if such sublicensee were Vical in the event of
such termination.  During the term of
this Agreement, Vical shall have the same responsibility for the activities of
a sublicensee as if the activities were directly those of Vical; provided,
however, that WARF shall be paid by Vical with regard to the activities of its
sublicensee as if those activities were Vical’s at the royalty rate set forth
in the chart below:


 


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  Royalty
  Rate to be Paid

  by Vical to WARF

  	
   

  	
  Royalty
  Rate Received by

  Vical from its Sublicensees

  	
   

  
	
  [...***...]%

  	
   

  	
  [...***...]%

  	
   

  
	
  [...***...]%

  	
   

  	
  [...***...]%

  	
   

  
	
  [...***...]%

  	
   

  	
  [...***...]%

  	
   

  



 


(ii)           In addition to the
royalties described in Section 2C(i) above, Vical agrees to pay to WARF [...***...] percent ([...***...]%) of all monetary fees and consideration received by
Vical (including equity, which shall be held in trust to WARF’s benefit pending
liquidity and subject to compliance with applicable securities laws, and option
exercise fees received upon the exercise of an option to obtain a sublicense
under the Licensed Patent) in exchange for rights granted under the Licensed
Patents, except for earned royalties as prescribed by Section 2C(i) and the
following:


 


(1)           Payments
received solely for the achievement of clinical milestones;


 


(2)           Payments
received as a reimbursement or remittance for the actual documented cost of
research and development activities performed by Vical (or its subcontractors)
under an agreement with a sublicensee under which Vical (including its
subcontractors) is obligated to undertake the research and development and
Vical receives specified payment for said research and development activities
or the specified payment is made to reimburse Vical for past research and development
activities actually performed by Vical (or its subcontractors) specifically on
behalf of the sublicense making such payment;


 


(3)           Payments
received as a reimbursement or remittance for the actual documented costs
associated with preparing, prosecuting and maintaining the Licensed Patents;
and


 


(4)           Bona
fide loans if Vical repays the loan in full.


 


Notwithstanding
the foregoing, Vical shall be obligated to pay to WARF [...***...] percent ([...***...]%) of any payments received solely for the achievement
of either time-based or combination time-based/clinical milestones (but
excluding payments received solely for the achievement of clinical milestones)
under (a) any sublicense of rights under the Licensed Patents granted under any
new agreement that is entered into by Vical after [...***...]; or (b) any amendment of an agreement existing before [...***...] that is entered into by Vical after
[...***...] (subject to the last
sentence of paragraph 2 of this Amendment), which amends such agreement to
include either time-based or combination time-based/clinical milestones.  Vical shall not owe any payment to WARF with
respect to any payments received by Vical solely for the achievement of either
time-based or combination time-based/clinical milestones under any agreement
existing before [...***...], unless an
amendment to that agreement as described in subsection (b) of the preceding
sentence is entered into by Vical after [...***...].


 


[    ] = Confidential Treatment
Requested; Text Filed Separately with the Securities and Exchange Commission


 


2

















 


(iii)          Vical shall have the
right to include in any sublicenses granted pursuant to this Agreement other
technology licensed, developed and/or patented by Vical and not within the
Licensed Patents.  In the event of such
sublicense, Vical shall make a good faith allocation regarding the percentage
of consideration provided under said sublicense attributed to Licensed Patents
and that attributed to such other technology. 
Within sixty (60) days of execution of said sublicense, or any amendment
providing such a sublicense, Vical shall forward to WARF a summary of the
technology included under said agreement, a summary of the financial
consideration to be paid, and a description of Vical’s proposed allocation.  In the event that WARF desires to challenge
any such allocation, Vical shall provide to WARF reasonably available documents
in support of Vical’s proposed allocation. 
If the parties disagree as to a fair allocation of such consideration,
the parties agree that the Chief Executive Officer of Vical and the Managing
Director of WARF shall meet and confer in good faith in an attempt to resolve
the dispute.  If a dispute remains after
thirty (30) days following the initial meeting of such representatives of Vical
and WARF, the parties agree to submit the issue to binding arbitration to be
conducted in Chicago, Illinois under the auspices of Judicial Arbitration and
Mediation Services, Inc. (“JAMS”).  The
parties agree that they shall mutually select a single JAMS representative to
preside over the arbitration proceeding. 
If the parties are unable to agree to the appointment of such
representative, then JAMS shall appoint one from its prevailing roster of
Chicago based representatives.  The
parties agree that the determination of the issues of the dispute and the
procedures for resolving the dispute shall be conclusively and finally resolved
by the JAMS representative, with the express understanding that the parties
desire a very efficient and expeditious resolution.


 


(iv)          Vical agrees to provide
to WARF within sixty (60) days of the execution of each agreement or amendment
granting rights under the Licensed Patents a written summary of the financial
terms of such agreement or amendment.”


 


2.             Vical and WARF agree
that the foregoing revisions to Section 2C of the Agreement shall apply to (1)
agreements and amendments entered into by Vical after [...***...], granting new or additional rights
under the Licensed Patents; (2) any amendments entered into by Vical after [...***...], amending the financial terms
associated with any rights granted under the Licensed Patents prior to [...***...]; and (3) monetary fees and
consideration received by Vical after [...***...],
in exchange for rights granted under the Licensed Patents prior to [...***...]. 
The parties acknowledge and agree that any consideration received by
Vical solely in exchange for its right to co-promote products under the 1991
Merck agreement, as amended, shall not be subject to the revised revenue
sharing provisions of Section 2C above.


 


3.             Section 2 of the
Agreement is amended to include the following new Section 2D:


 


“Vical hereby
grants to the University of Wisconsin, and hereby agrees to grant to other
academic institutions and other non-profit research institutions upon request,
without payment of any initial monetary consideration, a fully paid-up,
royalty-free, nontransferable, nonexclusive license to use the inventions of
the Licensed Patents for non-commercial research purposes.  As used herein, “non-commercial research
purposes” shall specifically exclude research sponsored by a for-profit entity
in which such entity


 


[    ]
= Confidential Treatment Requested; Text Filed Separately with the Securities
and Exchange Commission


 


3

















 


receives
rights, direct or indirect, actual or contingent, to the results of the
research.  For clarification, under no
circumstances will Vical be deemed to have granted, or agreed to grant, any
license or rights to the Licensed Patents for any commercial purposes to the
University of Wisconsin, any academic institution or other non-profit research
institution or any other non-profit or for-profit person or entity under this
Agreement.”


 


4.             Section 3A of the
Agreement is hereby deleted and replaced with the following:


 


“Vical
warrants that it or its sublicensees will diligently pursue commercialization
of the inventions of the Licensed Patents. 
Within one (1) month following the end of each calendar year until the
Date of First Commercial Sale of Products, Vical will provide to WARF a written
Development Report summarizing Vical’s product development activities since the
last Development Report, and the known and non-confidential development
activities of its sublicensees.  Within
one (1) month following the end of each calendar year, Vical will provide to
WARF a written report summarizing Vical’s sublicensing activities under this
Agreement and the sublicensing payments received during the preceding
year.  All development activities,
strategies and aspects of Product design and the like are entirely at the
discretion of Vical and its sublicensees, and Vical and its sublicensees shall
rely entirely on their own expertise with respect thereto.  WARF’s review of Vical’s Development Reports
and sublicensing reports is solely to verify Vical’s compliance with its
obligations under this Agreement.  All
Development Reports and sublicensing reports provided to WARF under this
Section 3A shall be deemed confidential and maintained in confidence by WARF.”


 


5.             The first
sentence of Section 3E of the Agreement is hereby amended by replacing “Section
3C” with “Sections 2C and 3C”.


 


6.             Section 8 of the
Agreement is hereby deleted and replaced with the following:


 


“A.          Patent Prosecution.


 


(i)            WARF hereby grants to
Vical the exclusive right to file, prosecute and maintain the Licensed Patents
and will provide reasonable cooperation to Vical, at Vical’s expense, in
connection with Vical’s exercise of such rights.  Vical shall provide to WARF a copy all significant prosecution
actions and correspondence received from and provided to the United States
Patent and Trademark Office as part of the filing, prosecution and maintenance
of the Licensed Patents.  Vical shall
provide such actions and correspondence to WARF within thirty (30) days of
their receipt by Vical; provided that any such information shall be kept
confidential and made available only to WARF’s patent attorneys, patent agents
and WARF employees who work with those patent attorneys and patent agents, in
each case who have a need to know such information, unless otherwise agreed by
the parties.  WARF shall hold such
actions and correspondences in confidence until made public, whether by Vical
or through the issuance or publication of the corresponding patent or patent
application.


 


(ii)           WARF and Vical
acknowledge that either party may pursue, or be pursuing, patent protection for
technologies having some relation to the inventions of the Licensed


 


4

















 


Patents, and
that under certain patent laws, they may be required to disclose certain
aspects of the prosecution history of the Licensed Patents as part of the
patent prosecution for such other technologies.  In such event, WARF and Vical shall be entitled to disclose its
files pertaining to the Licensed Patents to their respective patent counsel,
and the relevant aspects of the prosecution history to the relevant patent
office.


 


B.            Enforcement.


 


(i)            It is the intent of
WARF and Vical to protect the Licensed Patents under this Agreement from
infringement and to prosecute infringers or otherwise to act to eliminate
infringement when such action may be reasonably necessary, proper and
justified.  However, Vical shall retain
the sole and final right to decide on the enforcement strategy for the Licensed
Patents.


 


(ii)           Vical shall have the
right, in its sole discretion, to bring an action to enforce the Licensed
Patents; provided that Vical shall indemnify and defend WARF for any claims,
fees, judgments and any reasonable costs and expenses arising out of any
action, counteraction or other activities resulting as a consequence of Vical
bringing such action, unless WARF decides to join in such action as permitted
below.  WARF will provide reasonable
cooperation to Vical, at Vical’s expense, in connection with any such
action.  WARF shall have the right to
join in any action in its sole discretion. 
In the event WARF joins an action, WARF and Vical agree to meet to
discuss a fair and equitable sharing arrangement of the costs and revenues
generated through such action.  If the
parties disagree as to a fair allocation, then WARF and Viral will each bear
its own expenses in proceeding with such action throughout the course of such
action and share any revenues generated through such action pro rata based upon
the respective costs borne by each of them. 
In such case, after the conclusion of such action (or such earlier time
as mutually agreed by WARF and Vical), the parties shall follow the same
procedure as set forth in Section 2C(iii) above, starting with the meet and
confer step between the Chief Executive Officer of Vical and the Managing
Director of WARF, to determine whether a different allocation of costs and any
revenues generated through such action is appropriate.  In the event that WARF does not join in any
such action, Viral shall be entitled to retain all revenues resulting from a
judgment therein.  Any agreement
granting rights under the Licensed Patents and entered into as a result of
enforcement activities pursuant to this Section 8B shall be deemed to be a
sublicense granted pursuant to Section 2C above such that any revenues
generated therefrom shall be distributed in accordance with Section 2C.”


 


7.             Except as
otherwise provided in this Amendment, all terms and conditions previously set
forth in the Agreement shall remain in effect as set forth therein.  In the event that this Amendment and the
Agreement are inconsistent, the terms and provisions of this Amendment shall
supercede the terms and provisions of the Agreement, but only to the extent
necessary to satisfy the purpose of this Amendment.  Each party hereto represents to the other that it has the full
authority to execute, deliver and perform this Amendment in accordance with its
terms.


 


5

















 


IN
WITNESS WHEREOF, the parties hereto have duly executed this
Amendment on the dates indicated below.


 


	
  WISCONSIN ALUMNI RESEARCH FOUNDATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Carl E.
  Gulbrandsen

  	
   

  	
  Date: May
  20, 2004

  
	
   

  	
  Carl E. Gulbrandsen, Managing Director

  	
   

  
	
   

  	
   

  
	
  VICAL INCORPORATED

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Vijay B.
  Samant by David C. Kaslow, M.D.

  	
   

  	
  Date: May
  24, 2004

  
	
   

  	
  Vijay B. Samant, President and CEO

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ David C.
  Kaslow

  	
   

  	
   

  
	
   

  	
  David C. Kaslow, Chief Scientific Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Reviewed by
  WARF’s General Counsel:

  	
   

  
	
   

  	
   

  
	
  /s/
  Elizabeth L.R. Donley

  	
   

  	
   

  
	
  Elizabeth
  L.R. Donley, Esq.

  	
   

  
	
   

  	
   

  
	
  (WARF’s
  attorney shall not be deemed a signatory to this Agreement.)

  	
   

  
	
   

  	
   

  
	
  WARF Ref.
  No.: Felgner – P90042US

  	
   

  
						



 


6